U.S. crude oil stockpiles have been falling since the middle of March as refineries have increased their runs to produce more gasoline ahead of the peak summer demand period that starts in May. This has pushed WTI futures prices into a backwardation, when prompt futures are higher than later dated futures, reflecting the higher refinery demand.
The upward momentum brought by the OPEC cut is running out and Russian oil exports did not show any obvious decrease, leaving the supply-side with no further supports, said Song Yang, analyst from China Galaxy Futures in a note. U.S. consumer confidence dropped to a nine-month low in April as worries about the future mounted, further heightening the risk that the economy could fall into recession this year.